Is Ethereum Really Decentralized?

By Kapil Gauhar

Both blockchain as well as decentralization have become synonyms in the crypto industry.

It is the blockchain technology that made it possible to develop a network where all the users are equal.

A network where the information is distributed over innumerable computers in the world.

Since the decentralization brings an all new dimension to the concepts of security as well as transparency, it has gained a particular value for the commercial institutions and banks.

Well, a lot of people have doubts, that whether or not the Ethereum is decentralized as it claims.

That’s what we are going to discuss in this post.

In February 2018, Professor Emin Gün Sirer conducted a study that demonstrated that Ethereum is much more distributed than Bitcoin with the miners better spread across the world. This outcomes in the Ethereum network being more decentralized than its older sibling.

Here, the word “more” doesn’t mean “absolutely.”

So, the question persists, Is Ethereum really decentralized?

Well, there are so many reasons supporting the argument, and a lot of which are against it.

One such reason could be the commissions’ manipulation within the network that is caused by the massive launch of the CryptoKitties, that turned characteristics as decentralization into a myth.

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Decentralization Is Same As Distribution, Is It?

For a better understanding of decentralization in the big Ethereum blockchain environment, let’s take a look at concept described by the network’s founder Vitalik Buterin.

On his Medium post, Buterin expressed a lot of important thoughts about the need for decentralization as well as the ways to achieve it.

“Decentralization is one of the words that is used in the cryptoeconomics space the most frequently, and is often even viewed as a blockchain’s entire raison d’être”

According to Buterin, decentralization is one of the fundamental concepts of Blockchain Technology, that is important for protecting the networks from the problems like Faults, Attacks and Collusions.

Though countless researches as well as development are aiming to achieve and improve decentralization, yet there’s no proper explanation about this.

Buterin quoted a completely unhelpful but unfortunately all too common example of decentralization, which was spread among the users as well as developer expressing that “decentralization means that none of the nodes has the ability to control the processing of all transactions on the network.”

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Ethereum Network Is Protected Against the Attacks, Is It?

What makes the network decentralized?

There are basically 3 essential components which really constitute the foundation of this unique characteristic.

If any one of them works incorrectly, the entire system can be turned into a centralized entity.

The 3 components which make the network like Ethereum decentralized –

  • Fault Tolerance – Decentralized systems are Less Likely to fail by accident. This is because they rely on many individual components which are not likely to fail.
  • Attack Resistance – Decentralized systems lack sensitive central points, which means that there are several points spread across the world. That way, it is impossible for an attacker to do so. And it is costlier to attack innumerable central points than attacking one central points.
  • Collusion Resistance – In a decentralized system, it is much harder for the participants to collude to act in such a way that benefit them than the other participants.

After all the 3 components of decentralized system, it may seem that everything is simple.

But It’s not!

At the protocol level, the situation seems a bit different.

For instance,

Fault Tolerance is completely useless in case, for some reasons, a large number of components computers fail to process the blocks.

For this, Vitalik Buterin cited a real life example –

“Sure, four jet engines are less likely to fail than one jet engine, but what if all four engines were made in the same factory, and a fault was introduced in all four by the same rogue employee?”

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The Answer!

Needless to say, blockchain and decentralization are two significant parts of any cryptocurrency.

However, the flaws resurfacing Ethereum blockchain confirm that the network is not 100% decentralized.

There are several centralizing factors in Ethereum which still need a lot of work for their elimination.

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Kapil Gauhar

Kapil Gauhar is the founder of Blogger’s Gyan. He is a Passionate Blogger, a Big Thinker and a Creative Writer. His passion for doing friendship with words and letting people know about the wonders of the Digital World is what motivates him to take writing as a career.

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